SUBSIDIES: Roadmap laid out for proper utilisation of oil, food and fertiliser subsidies.
The government has set a deadline of March 2012 from when subsidies will be directly handed out to the targeted individuals. This was done by Finance Minister Pranab Mukherjee, who clearly laid out a roadmap for proper utilisation of oil, food and fertiliser subsidies, expressing serious concern over it not reaching those who need it the most.
The minister also said the task force set up under Unique Identification Authority of India Chairman Nandan Nilekani was working out a feasible model to ensure an effective mechanism to dole out subsidies to targeted beneficiaries. The panel includes secretaries from the ministries of finance, chemicals & fertilisers, agriculture, food, petroleum and rural development.
“The government provides subsidies, notably on fuel and foodgrain, to enable the common man to have access to these basic necessities at affordable prices. A significant proportion of subsidised fuel does not reach the targeted beneficiaries and there is a large-scale diversion of subsidised kerosene oil,” Mukherjee said while presenting the Budget for 2011-12.
The task force would also seek to align the issuance of unique identification numbers to track the target beneficiaries.
He added that in order to make the system transparent and efficient, the government would move towards direct transfer of cash subsidy to people living below poverty line (BPL) in a phased and gradual manner from March 2012.
He also asked the task force to prepare and present a draft report by June this year.
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The government currently provides kerosene at subsidised rates to BPL families through the Public Distribution System. It also provides LPG at a subsidised rate to households. For fertiliser, the government provides subsidy to companies so that these can be provided to farmers at cheaper rates.
“A move towards direct cash transfer of subsidies for people below the poverty line in the case of kerosene, LPG and fertilisers is a positive step. I hope such exercises are done for other goods as well in future. This will go a long way in plugging pilferage,” said Infrastructure and Logistics Federation of India President Sushil Jiwarajka.
The revised estimates had put the government’s total subsidies bill at Rs 1,64,153 crore for 2010-11. The subsidy bill on food, petroleum and fertilisers for 2011-12 has been pegged at Rs 1,34,210 crore — Rs 60,570 crore for food, Rs 23,640 crore for petroleum and Rs 50,000 crore for fertiliser. In the revised estimates for 2010-11, subsidy on food was at Rs 60,600 crore, petroleum at Rs 38,386 crore and fertiliser at Rs 55,000 crore.